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Superfund Update: A New Tax to Clean Up Toxic Waste

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With 606 abandoned Superfund sites to clean up at taxpayer expense, the Environmental Protection Agency’s proposal to re-establish a “polluter pays” tax on oil, gas and chemical companies might seem likely to win fast approval. Instead it has sparked renewed debate about the necessity and efficacy of such a tax.

“To me a ‘polluter pays’ tax is where those specific companies that cause the pollution pay,” said Kate Probst, a Senior Fellow at Resources for the Future and author of a 2001 book on Superfund costs. “This is on all [chemical, oil, and gas] companies regardless of good actors or bad actors, and it doesn’t distinguish based on a company’s performance or how many contaminated sites they have.”

Sen. James Inhofe, R-Okla., echoed Probst in a hearing of the Senate Environment and Public Works subcommittee Tuesday, “Why would you go out and pass taxes on companies that have nothing to do with any type of a spill?" he asked.

The original tax, a provision of the Superfund program established in 1980 to clean up the nation’s most contaminated abandoned industrial sites and waterways, was levied on corporations that produced or sold chemicals and substances considered hazardous to the environment. After the tax expired in 1995, and the fund ran out of money at the end of 2003, the federal government stepped in with taxpayer dollars to pay for cleaning up these “orphaned” toxic sites and waterways. Since fiscal 1981, the government has spent an average $1.2 billion a year on the Superfund program and the trust fund has shrunk to $130 million from a high of $5 billion in 1997.

EPA Administrator Lisa Jackson sent House Speaker Nancy Pelosi a letter on Monday proposing that Congress reinstate the tax for 10 years, beginning Jan. 1, 2011. The proposal, consisting of excise taxes on crude oil, petroleum products and designated chemicals as well as a special, broad-based environmental income tax on large corporations, would bring in almost $19 billion over a decade, according to the EPA.

According to the EPA, there are 1,279 Superfund sites currently being cleaned up, including the 606 being rehabilitated with taxpayer funds. Between 20 and 25 sites a year will be added to the Superfund list, according to a GAO report released Tuesday ‘We have before us two choices for these orphan sites: force taxpayers to foot the bill for the cleanup or get the polluting industries to pay … I can tell you where I stand: against the polluters and with the taxpayers,” said Sen. Frank Lautenberg, D-N.J., who introduced a bill to reinstate the tax with Rep. Earl Blumenauer, D-Ore.

Costs to the chemical industry if the tax is reinstated would be an estimated $328 million in 2011 and would rise to $2.8 billion over 10 years, according to an American Chemistry Council brief on Superfund . “America’s chemical makers and others targeted by the Superfund tax have paid for site remediation several times over. We paid for sites for which we were responsible, we helped pay for ‘orphan’ sites where we were not the responsible party, and we paid corporate taxes … It would be inappropriate and unfair to impose Superfund taxes on companies with no responsibility for site contamination,” Cal Dooley, president and CEO of group, said in a statement.

And though EPA cites the tax as a means to “increase the pace of Superfund cleanup,” Probst says she doesn’t “think throwing money at the program absent changes in implementation will do anything to truly accelerate cleanup,” she said. The added tax revenues from companies could help with enforcement, however, she added.